A turn to the left

A turn to the left

Neerja Chowdhury analyses why the Congress has decided to oppose the economic reforms it started a decade ago.

The Congress’ left of centre tilt at Bangalore is clearly driven by its desire to be distinctly different from the BJP, and to get into the election mode with five assembly elections five weeks down the road and more states set to go to the polls next year.

The party’s cleverly-worded economic resolution passed at the just-held plenary session in Bangalore was more a political statement than an economic agenda for action.

Faced with the Hamletian dilemma, to be or not to be for the reforms that are being pursued by the BJP, the Congress has gone for a pro-poor rhetoric so as to recapture its old niche of being a party which is for the Dalits, the disadvantaged, the minorities and women. The party has rechanted the mantra of strengthening the public sector, expressing itself for policies that are in the interests of labour and the farming community unhappy with the lifting of the quantitative restrictions.

Jairam Ramesh, one of the authors of the resolution, is upfront. ‘‘This is a document of a party in the opposition. It cannot be the document of a party which will govern,’’ he says.

Madhav Rao Scindia, Deputy leader of the Congress in the Lok Sabha who is being dubbed as the party’s ‘‘new socialist’’, says the Congress’ opposition is not to liberalisation per se but to the brand of liberalisation pursued by the BJP, which has been ‘‘disastrous’’.

‘‘The BJP type of liberalisation is not acceptable because it is catering only to the interests of the elite. We are for liberalisation which the Congress has pioneered but it has to be tempered so as to safegurad the interests of the domestic industry, farmers and economically weaker sections. It cannot be a laissez faire liberalisation,’’ Scindia says.

Prithviraj Chavan, who was a member of the economic introspection group which laid the framework for the Bangalore resolution, talks about a synthesis of a higher rate of growth with safety nets. ‘‘The Congress has clearly reaffirmed its commitment to the continuation of reforms, essential for higher growth rates... At the same time, we have to finetune the policies with proper calibration and sequencing and provide safety nets and specially directed efforts at the empowerment of the poor.’’

Beyond the rhetoric, the new and substantive element in the Bangalore document, which the party manifestos in 1998 and 1999 did not contain, is its stand on disinvestment. While stating that it is not opposed to the reforms process nor to disinvestment of PSUs, the party has clearly opposed the disinvestment of profit making public sector undertakings below 51 per cent. It has also opposed the denationalisation of the banks and makes it quite clear that the government holdings in nationalised banks should not drop below 51 per cent.

The draft that was orginally circulated to partymen in Bangalore did not contain this paragraph. The four lines were inserted by the CWC, and the overwhelming opinion in the party’s apex committee was that profitmaking PSUs should not be divested nor should the Government give up its dominant position in the management of the company.

A sharp tussle in the party preceded the resolution and the Congress finally had to strike a compromise between the hard reformers and those who urged caution. Before the document was finalised, Manmohan Singh while agreeing to the bit about on the disinvestment of profit making PSUs, had his way on the inclusion of a sentence which according to Jairam Ramesh ‘‘salvaged’’ the situation. It states that ‘‘public enterprises that are making healthy profits on a continuous basis in a competitive environment will be provided all opportunities for further growth’’.

In other words, the Congress would not be averse to the disinvestment of PSUs which may be making profits but are able to do so in a non-competitive environment. The oil and the fertiliser sector, which may be making profits today but which operates in a monopoly environment, for instance, would thereby qualify for disinvestment.

Finally, Manmohan Singh, who had been sulking since he came under attack for being the author of a policy which brought the Congress tally down to 112 in the 1999 Lok Sabha elections, went along with the final resolution, and he piloted it at the plenary. Aloofness on his part would have sent the wrong message to the international community about the Congress’ commitment to the reforms process. As it is, the party is getting enough e-mails from the NRI community overseas which is perturbed about the leftward shift it perceives in the Congress stand.

The biggest champion of the Congress’ commitment to the public sector, stated unabashedly at Bangalore, was Sonia Gandhi herself.

The draft of the economic resolution had been prepared by a five member group, comprising Manmohan Singh, Pranab Mukherji, Jairam Ramesh, Kamal Nath and Murli Deora. It was then put to a 15 member group, and to the CWC where the changes were introduced and finally before the AICC and the plenary.

There was a time not so long ago when there was the lone voice of Vyalar Ravi, former PCC chief in Kerala, opposing the move to support the opening up of the insurance sector. Today Ravi is not alone. Priya Ranjan Das Munshi from West Bengal also argued passionately for reverting to the party’s old pro-poor moorings. So did Mani Shankar Aiyar, Arjun Singh and Scindia. In contrast, the Congress chief ministers who are quietly pursuing the BJP type reforms in their respective states remained by and large silent.

Congressmen in Kerala and West Bengal have had to compete with the Left rhetoric in the two states for electoral advantage and both states are soon going to the polls. Aiyer, who is a special invitee to the CWC, has been cautioning the party about the fallout of the reforms process for sometime now. The original ‘‘sinner’’, of course, is Arjun Singh who had reportedly raised questions about the opening up of the economy during Cabinet meetings in 1991. With the party having decided at Bangalore to be willing to join a coalition government at the Centre, both Singh and Scindia are keeping the Left parties on their right side.Pranab Mukherji, who headed the committe to draft the resolution and who was also the chairman of the economic introspection group last year, as always struck a middle of the road position between the two groups.

On labour reforms also, the Congress was populist and played it both ways. It fell short of taking a clearcut position. The resolution says, ‘‘...the Government is threatening both organised labour with amendments to the Industrial Disputes Act and the Contract Labour Act which might undermine labour rights won after years of struggle. The Congress will not support legislative changes which are anti-labour.’’

The party did not spell out clearly whether it considers the amendments the Government proposes in the two labour laws as anti-labour. Or whether it proposes to oppose these legislations. Even an industry’s closure can be justified as anti-labour on the ground that it would throw workers out of employment. Most partymen think that the Congress will oppose the proposed legislations, given the overwhelming view against it in the party, but in the way it has formulated its stand, the party has left a backdoor open.

Though the Congress initiated the reforms process in 1991, which was pushed forward by the UF government and later given a fillip by the BJP, the party found itself slotted as the ‘B’ team of the BJP. During the last three years, it has not been able to shake itself free of that image. The Bangalore document is an attempt in that direction.